Canadian election won't slow tar sands growth

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No matter which party wins the Canadian election, the tar sands will continue to expand for decades, and so will emissions

(Canadian Press, September 30, 2008) No matter which of the top three national parties emerges victorious in the federal election Oct. 14, oilsands output will likely keep on rising — at least in the near term, a political economist says.

Gordon Laxer, director of the University of Alberta’s Parkland Institute, says the policies announced by the Conservatives, Liberals and New Democrats vary from each other but none of them would prevent oilsands output from growing over the next few years.

It will be “absolutely full-steam ahead” in the oilsands under a re-elected Conservative government but even the Liberal and NDP programs would have minimal impact on output in the short run, he said.

The Tories are calling to reduce greenhouse gas emissions by 20 per cent compared with 2006 by 2020. That means projects starting up in 2012 will need to capture their carbon dioxide emissions and store them, rather than releasing them into the atmosphere. But in Laxer’s opinion, there’s no credibility to the Conservatives’ proposed targets since “the steps to get there are not in place.”

He said the outlook for the oilsands would not be much different under the Liberals’ Green Shift plan.

The Liberals are calling for a levy of $10 tax for each tonne of carbon output at the outset and ramp up to $40 per tonne within four years. The new levy wouldn’t apply to gasoline, which the Liberals say is already taxed at a rate of $40 per tonne.

Laxer said the Liberals’ carbon tax would only affect tar sands production if it raises costs so much that they slow down development, adding he doesn’t think that’s going to happen.

“The tar sands will still be profitable unless oil drops down to $60 to $70 a barrel or less . . . If the bottom really dropped out of it, then the carbon tax might start to bite,” Laxer said.

The New Democrats have both called for a moratorium on new oilsands developments, until tough new emissions standards can be met.

But even under the NDP plan, Laxer said, output from the oilsands will still likely increase over the next few decades, since the many projects that have been approved or are under construction will still go ahead.

“We may still have a doubling of tar sands production, even with no new approvals,” he said. “You would still have a fair degree of expansion, but it wouldn’t be unlimited expansion.”

University of Calgary professor Bob Schulz, however, said the high price tag of some of the emission-reducing technologies will likely factor into spending decisions in the oilpatch — but not as much as the world price of crude.

“Irrespective of political party issues and the election issues, the world price for oil is going to be a more significant factor than any of the political parties would raise,” Schulz said.

The Green party, which is fielding candidates in nearly every federal riding, is calling for a moratorium on oilsands development.